Premier of the British Virgin Islands (BVI) Andrew Fahie has called on the international banking community to stop de-risking and to allow the territory to continue to play its “vital role in the global economy.”
In addressing the 67th meeting of the Organization of Eastern Caribbean States (OECS) authority here, Fahie said inspite of the BVI’s “important role in the global economy and its robust regulatory regime, the BVI, like other regional international financial centres, continues to suffer from an increasingly risk-averse global banking environment.”
He said that environment has “categorized our jurisdictions as high risk, resulting in discriminatory policies being levied on our corporate service providers and their clients doing or trying to do business facilitated by the jurisdiction.
“Companies need bank accounts to do global business,” the premier said. “The inability to open bank accounts and to engage in other banking business has severely curtailed business growth, especially in the last six years.
“With little transparency in how these banking de-risking policies are established or administered, it has been challenging to address the cause of the underlying concerns and to provide remedial actions to alleviate the burdens being put on our financial services industry,” he added.
“The BVI is not a banking centre per se but still relies on the banking infrastructure to engage in its global business.
“Our trust and corporate service providers are being outright denied services or are being indiscriminately charged exorbitant fees in the tens of thousands of dollars to do basic banking business for their clients,” Fahie continued. “The fees are applied and deducted with no explanation and no recourse.
“The banking situation critically impacts our economic vulnerability and further impedes and threatens our ability for economic recovery from the devastating effects of the 2017 hurricanes.”
Fahie said the territory continues to invest heavily in its infrastructure “to thwart financial crime and to actively build walls to prevent those involved in nefarious activities from finding haven in our jurisdiction.”
He said the territory’s robust regulatory systems and the stamps of approval by the international standard setters, such as the Financial Action Task Force (FATF), “should provide the necessary assurance that banks require to stop de-risking from our jurisdictions and to allow correspondent banking relationships to continue and to be established with banks in our jurisdictions.”
Fahie said de-risking continues to place “excessive burdens” on the region’s financial infrastructure and impedes our countries’ and territories’ abilities to effectively engage in global business and have sustainable economic growth.
He said de-risking has led to restricted access and, in some instances, to the “complete loss of correspondent banking relationships,” stating that correspondent banking relations are “the axles that keep the wheels turning in the systems of global finance and trade.”
The BVI premier said connectivity in the highly interdependent world means that there must be “conduits to facilitate trade.”
The premier said this year marks 35 years since the BVI introduced its first version of its international business company, “a tool that has been used globally for cross border trade, investment and business.”
“Companies incorporated in the BVI must comply with rigorous customer due diligence and know-your-customer checks, and enhanced customer due diligence for persons identified as politically exposed persons (PEP).”
He said the FATF, the OECD, the EU and other bodies have “assessed and recognized the BVI as compliant with the global standards established for anti-money laundering to counter terrorist financing and to stop tax evasion.”
“We, therefore, call on the international banking community to stop de-risking and to allow us to continue to play our vital role in the global economy, through the use of our Business Companies, which, for 35 years, have been a conduit to facilitate cross border trade, investment and business,” Fahie urged.
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